They're a cheap date. Meaning: All mutual funds charge management fees, called the expense ratio. Index fund fees are far lower than managed funds. That means a lot more money in your pocket over the long haul. How much?

A 45-year-old with $20,000 in her retirement account would end up with about $70,500 at 65, assuming 7% in annual returns and 0.5% in fees. But if she paid 1.5% in fees during that time, she'd end up with only $58,400—17% less. Ouchy.

They deliver the goods. Assuming you own an index fund for many years, you're likely to see swings in its performance, but on average you'll reap a steady profit, lower taxes (with no sweat on your part) and—after taking fees into account—most studies show that index funds deliver bigger returns, compared to managed funds.